The USD/MXN hit earlier today at 20.65, the highest level since June but then pulled back making a reversal. The momentum indicator turned to the downside and price dropped to test the 20-day moving average, showing lack of strength so far for a move above 20.65.

A daily close above 20.50 could reinforce the bullish trend, but a breakout on top of 20.65 is needed to open the doors to further gains.

After today’s reversal and the failure at 20.60, the Mexican peso could recover further, particularity if the pair drops firmly under 20.35 (20-day moving average). The next support to watch is 20.20; below the 20.00 area would be exposed.

The main trend still points to the upside in USD/MXN, but the US dollar positive tone in the short-term eased after today’s reversal, and now the bias is skewed toward an extension of the bearish correction.